MSOS, TRLV Slide After Hours As DEA Judge Pauses Cannabis Rescheduling Case

• Rescheduling changes where marijuana sits under the federal Controlled Substances Act instead of legalizing it.
• In April, the Justice Department moved two categories of marijuana to Schedule III: FDA-approved products that contain marijuana, and marijuana grown or sold under a qualifying state medical license.
• The stay does not reject rescheduling or cancel the earlier medical-marijuana rule.

The AdvisorShares Pure US Cannabis ETF (MSOS) fell as much as about 8% after hours Tuesday after a federal judge paused the leftover case on reclassifying marijuana, including adult-use product, to Schedule III from Schedule I.

Trulieve Cannabis (TRLV), one of the ETF’s largest holdings, finished regular trading at $12.41, up 0.6%, then traded as low as about $11, a drop of roughly 9% in extended hours.

What The Judge Ordered

DEA Chief Judge Derek Julius paused the case on Tuesday afternoon. The public hearing ended in mid-July. He had been expected to send a recommendation to the DEA administrator next. That step is now on hold.

On Sept. 28, three hearing participants who oppose broader rescheduling — DUID Victim Voices, Dr. Kenneth Finn, and the National Drug and Alcohol Screening Association — asked him to add a Sept. 23 Government Accountability Office report on drug-scheduling procedures to the record and to allow extra briefing. Julius said a stay was warranted while he decides whether to reopen the record. The government must respond by Oct. 13. Other parties may file replies by the same date.

What Rescheduling Means

Rescheduling changes where marijuana sits under the federal Controlled Substances Act. It is not the same as legalizing it. Schedule I is the tightest box: high abuse potential and no accepted medical use. Marijuana has been listed there since 1970. Schedule III is looser. It covers drugs with accepted medical use and lower abuse potential than Schedule I or II. Moving a drug down the list does not take it off the list.

In April, the Justice Department moved two categories of marijuana to Schedule III: FDA-approved products that contain marijuana, and marijuana grown or sold under a qualifying state medical license. The paused case is about the rest of the plant, including adult-use product.

The stay does not reject rescheduling or cancel the earlier medical-marijuana rule. It delays a decision investors had treated as a near-term catalyst.

How Did MSOS, TRLV Retail Traders React?

On Stocktwits, retail sentiment around TRLV and MSOS stayed within the bullish territory at he time of writing.

“Broader rescheduling is less likely now,” a Stocktwits user wrote.

Another user dismissed the selloff, saying a rescheduling will come in the future.

TRLV has gained about 43% year-to-date. 

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